A Review of the Nigerian Energy Industry

Nigerian govt can’t stop kerosene fraud without deregulation – Maku

Crashing_Kerosene_price09 December 2013, Abuja – The Federal government cannot stop the manipulation of kerosene prices by middlemen unless there is total deregulation of the kerosene and petroleum sector, the Minister of Information, Labaran Maku, hinted on Sunday.

Mr. Maku stated this in during an inspection tour of the Kaduna Refining and Petrochemical Company (KRPC).

The government currently subsidises kerosene with an approved nationwide price of N50. However majority of filling stations and retailers sell at more than 100 per cent of the approved price. Most Nigerians buy at over N100 per litre with regulatory agencies seemingly unable to enforce the regulated price.

In proffering a solution to the exploitation of millions Nigerian kerosene users, Mr. Maku said deregulation was the best solution to problems in the sector. He added that middlemen and other players in the industry had taken advantage of government’s monopoly to shortchange the country.

Using the kerosene fraud as an example, Mr. Maku said “unless government deregulates this sector, middlemen will continue to feed fat on the sweat of the poor masses.”

He said that deregulation would not only open up the market and give Nigerian kerosene consumers options to select from but would address the challenges created by middlemen.

The exploitation of kerosene sale to Nigerians despite the deregulation is already a source of concern to lawmakers with the House of Representatives recently ordering an enquiry into the scandal.

While speaking in Kaduna, Mr. Maku also commended the present management of the Nigerian National Petroleum Corporation (NNPC) for its management of the nation’s refineries.

In his reaction, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Andrew Yakubu, said deregulation would promote efficiency in the oil industry.

He said that the planned partial privatisation of the nation’s refineries was aimed at addressing the perennial problems associated with the management of the companies by government.

Mr. Yakubu said that privatisation would also enable government to channel resources, previously used for maintenance, to other needs.

The Acting Managing Director of KRPC, Bafred Anjugu, said the company recorded some milestones in 2013.

He said that the engineers of the KRPC had “re-streamed” the fluid catalytic cracking unit which had been down since 2005.

Mr. Anjugu said the company was refining each of the assorted products per month and would attain 90 per cent production capacity by the time the Turn Around Maintenance (TAM) was completed. He said the company would generate about N1 trillion per year from the sale of products after TAM and would also attain 330 days of operation per annum.

The acting managing director said the company’s production capacity was presently limited by the menace of vandalism of pipeline and other peculiar challenges.

The team visited the 56 mega watts power plant in the company as well as the drum and tin manufacturing factories at the refinery complex.

– Premium Times

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